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About Raiding Your Retirement Plan - Yahoo! Finance
Through diligent contributions to your 401(k) at work, you may have built up a sizable nest egg for your future retirement. And if a hardship or financial emergency arises, it might be tempting to see that money sitting in the spotlight there when you could use it for something else. As tempting as it may be, you should make sure you’re aware of the consequences of withdrawing from your nest egg early. Depending on your age, there may be penalties – over and above paying income tax on the money – for early withdrawal. Sometimes it may be better to take a loan from that nest-egg, but even doing that can have negative consequences if you’re not careful. There has been a disturbing trend over the last few years for people to increasingly raid their tax-advantaged retirement accounts, likely at least partially due to the pandemic-related financial issues. Nevertheless, as this Yahoo! Finance article by Kerry Hannon points out, raiding your retirement savings for needed cash should not be done capriciously.